Airbus (AIR.PA)

Business Overview

Airbus is the narrowbody half of the duopoly that has already worked through its ramp: an 8,754-aircraft commercial backlog worth €539.7B at 31 December 2025, with deliveries and the balance sheet both past the trough Boeing is still in. FY2025 deliveries totalled 793 aircraft (A220: 93; A320 Family: 607; A330: 36; A350: 57), and the A320 Family alone carried 7,151 aircraft of backlog at end October 2025. The market values the shares at €175.74 apiece across 787.2M shares in issue, roughly €138.4B (~$159.9B at EUR/USD 1.1554 on 10 June 2026). Airbus reports in EUR.

External revenue split was Platforms 89% and Services 11%. Commercial Aircraft EBIT Adjusted margin was 10.4% (€5,470M on €52,577M). Airbus does not file a standalone services-only operating margin; the divisional 10.4% is a blended OEM-heavy proxy. The OEM vs aftermarket guide contrasts this Platforms-heavy mix with engine makers running 64-75% services revenue.

Boeing plus Airbus delivered 86% of 2024 global aircraft; forward outlook is ~80% combined with COMAC ~8%. The duopoly guide maps certification barriers and sole-source component lock-in that sustain this structure.

How the Numbers Read

FY2025 commercial net orders were 889 (1,000 gross) against 793 deliveries, a computed book-to-bill of ~1.12× on commercial units (new orders relative to deliveries in the period). Company-wide value book-to-bill was above 1. Derived total backlog-years are ~11.0 years (8,754 ÷ 793); A320 Family backlog-years are ~11.8 years (7,151 ÷ 607). Both sit inside the 8-12 year range this site treats as a healthy narrowbody backlog. The backlog guide uses Airbus A320 ~11.8 yr alongside Boeing 737 ~9.9 yr as the peer proof points.

A320 production is targeted at 70-75/month by end-2027, stabilising at 75/month. That rate step drives revenue and working capital as the backlog converts from FY2025's 607 A320 Family deliveries. Free cash flow was €4.8B in FY2025, or €4,574M before customer financing. Net cash was €12.2B, a balance-sheet contrast to Boeing's ~$24.7B net debt and negative FCF.

Valuation Framework

Airbus shows what a narrowbody OEM looks like past the ramp trough: positive segment margin, positive free cash flow, a net-cash balance sheet and Consolidated EBIT Adjusted of €7.1B in FY2025. Boeing posted a ramp-trough loss the same year.

The ramp to 75/month is already in the company's own guidance. What isn't settled is whether margin holds near 10% as supply-chain capacity expands to match it, or whether input-cost inflation absorbs the gain before it reaches the EBIT line.

What to Watch in the Financials

A320 production rate. 607 Family deliveries in FY2025 against a 70-75/month end-2027 target. Monthly rate milestones drive revenue recognition and supplier payments ahead of delivery.

Derived backlog-years (~11.0 yr total, ~11.8 yr A320 Family). Inside the 8-12 yr range. Compression below 8 years would mean deliveries outrunning orders. Sustained orders without rate hikes could hold the ratio above 12.

Commercial EBIT Adjusted margin. 10.4% in FY2025. Track whether Platforms scale lifts margin toward the mid-cycle teens, or supply-chain inflation and ramp costs pin it near 10%.

FCF and customer financing. Reported €4.8B FCF, or €4,574M before customer financing. Airline financing support moves the headline, so read both.

Key Risks

Ramp execution. Moving from 607 A320 Family deliveries toward a 75/month stabilised rate requires supplier capacity, labour and quality systems to scale in parallel. A rate cap would strand backlog-years above 12.

Platforms-heavy mix. 89% Platforms revenue leaves less aftermarket cushion than engine OEMs if new-engine margins compress on pricing or input costs.

FX reporting. EUR filer, USD peers. State EUR/USD and date on cross-peer screens (1.1554, 10 June 2026 here).

Duopoly pricing pressure. ~80% forward combined share is durable but not static. COMAC single-aisle entry and airline fleet decisions can shift book-to-bill over a cycle even with 8,754 units already on backlog.